Hartz: COVID-19 as a roadmap for IP exceptions new and old

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For more than a hundred years, there was a movement to harmonize international intellectual property laws and procedures through treaties and trade legislation. A recurring theme of these developments is the effort of the more developed and industrialized actors (who have the most invested in formal IP systems) to get less-developed countries to improve their IP protections and enforcement. A theory behind this is that outside foreign investment, drawn in and reassured by the improved IP system, will ultimately benefit the less-developed country. The most comprehensive treaty governing these relationships today is the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS.

But what happens when noneconomic incentives are prioritized? Can the international IP system adapt? The COVID-19 pandemic brought this issue to light. The virus does not respect international borders; should the tools for combatting the virus be free from restrictions in the same way? In 2020, India and South Africa proposed a broad IP waiver for COVID-19 vaccines, therapeutics and diagnostics. After much debate over two years, in June 2022, the WTO instead adopted a much narrower potential exception: Patents rights for production and supply of COVID-19 vaccines, without the consent of the patentee, may be waived by a member country under TRIPS.

The “waiver” does not address other IP forms, including trade secrets and know-how, that may be critical to actually manufacturing vaccines. The June 2022 decision included an additional six months to discuss expanding the waiver provisions to therapeutics and diagnostics, but in meetings at the end of 2022, the WTO indefinitely extended the timetable for the expansion. Between the delays in negotiating this exception, the limited scope and existing manufacturing capacities, there are already significant vaccination and treatment discrepancies between the haves and the have-nots of the world, leading to a “too little, too late” sentiment among public health commentators.

But the fact that the COVID waiver exists at all can be seen as opening the door to other new exceptions with broader IP implications. At a recent talk, the director general of the WTO was asked whether she would support an IP waiver for climate technologies. She answered that those types of arguments were expected going forward. Maybe we are already on a slippery slope to undermining IP rights, but the arguments against the COVID waivers — that these exceptions erode the incentives to innovate in the first place — are also being raised in the climate context.

On the other hand, it could be argued that the COVID waiver — limited to vaccines and patent rights — was not even really necessary under TRIPS. The June 2022 waiver itself is optional, providing that a country “may limit” exclusive rights. But the treaty already permits members to provide “limited exceptions” to patent rights (Article 30) and compulsory patent licensing for “national emergency” purposes (Article 31), both subject to certain conditions, and suggests that patents for inventions might be excluded when necessary “to protect human, animal or plant life or health” (Article 27). These same provisions could be employed in arguments to exempt climate-related technologies. For example, Article 27 contemplates exceptions “to avoid serious prejudice to the environment.” In addition to climate issues, a need for free access to technology could be articulated for other fields, such as essential medicines or food production. Are broad international IP exceptions on the horizon for these and other pressing global problems? Time will tell.

In the meantime, despite all the discussion on COVID waivers on the international stage, the U.S. has no such waiver, and Moderna and Pfizer-BioNTech are parties to a patent dispute in federal court, along with parallel suits in the United Kingdom and Europe. Both are also facing infringement lawsuits from third parties over their vaccine technologies. Given the limitations of the waivers, there may be little practical fallout, particularly as more efforts are made to focus on non-COVID issues internationally.

Given the glacial pace of international law, could the same arguments be made to create new exceptions in the context of domestic IP disputes? In law school, students learn about public policy doctrines in a variety of areas. Day-to-day IP practice is driven by statutes and economic justifications, such that broader concepts of public policy writ large are less prominent. To the extent concepts of morality/policy are invoked, it is most often in the context of trademark and unfair competition — for example, false advertising or unlawful use, and even these are tied to statutory language.

But there is room to argue that new exceptions can be accounted for in the concepts of justice already embedded in U.S. intellectual property law. For example, seeking injunctive relief will invoke consideration of the public interest where the public health and environmental concerns proffered as justifying a new IP exception could weigh against entry of an injunction, effectively granting a waiver.

Finally, here’s one closing anecdote suggesting an off-the-books public health exception: I have heard tales of a patent case our firm was involved in decades ago in which a children’s hospital admitted infringement, but the patentee was ultimately awarded zero damages.•


Blake Hartz is a partner at Woodard Emhardt Henry Reeves & Wagner LLP. Opinions expressed are those of the author.

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